Jeep Hopes for Revival With New Grand Cherokee and Other
Models

2005 Jeep Grand
Cherokee

2005 Jeep Grand
Cherokee

2005 Jeep Grand
Cherokee

NEW YORK April 7, 2004; John Porretto writing for the AP
reported that after sparking America's craze with sport utility
vehicles 20 years ago, Jeep has seen its share of the SUV
business shrink in recent years, largely because of a flood of
rival models in all shapes and sizes.

Adding to the problem, analysts say, is Jeep's own limited
lineup: the high-end Grand Cherokee, smaller Liberty and
military-inspired Wrangler.

The numbers speak for themselves: a 4.2 percent drop in
sales last year and the fourth straight year in which Jeep's
market share either fell or remained flat.

The recent demise has contributed to a larger headache at
DaimlerChrysler AG's struggling Chrysler Group, which sorely
needs a better showing from Jeep if it hopes to post a profit
in 2004 after missing its break-even target last year.

Jeep sold 440,559 vehicles in 2003, down more than 110,000
from its peak in 1999. Chrysler took on Jeep in 1987 with its
acquisition of American Motors Corp.

"Unfortunately, Chrysler has allowed the Jeep brand to
deteriorate, and they've lost ground to Toyota, Honda and
Nissan," said Art Spinella, president of CNW Marketing Research
in Bandon, Ore. "It's something they could have avoided with
fresh product in a timely fashion."

Jeep hopes to quiet that type of criticism in 2004 by
launching its most aggressive product offensive in years. The
push takes center stage at the New York International Auto
Show, where Jeep will show three new or revamped products.

During a media preview Wednesday, Jeep is scheduled to
unveil the third generation of the Grand Cherokee, which was
last redone in 1999. Jeep says the new model will be a few
inches wider to provide more stability and about 5 inches
longer to allow more leg and cargo room.

It also will be more powerful, becoming the first Jeep to
offer Chrysler's popular Hemi V-8 engine.

The New York exhibit also will mark the debut of a more
rugged version of the Liberty Renegade, and a diesel-powered
Liberty that can increase fuel efficiency by 25 percent.

With those vehicles going on sale later this year, and a
larger version of the Wrangler now reaching showrooms, Jeep
hopes to be back above 500,000 in annual sales in the next few
years.

"It's probably not going to happen this year, but going
forward that's certainly an objective for us," Jeff Bell,
Chrysler Group's vice president for the Jeep division, said in
a pre-show interview.

Bell wouldn't talk specifically about new models beyond
Grand Cherokee, Wrangler and Liberty, but he made it clear that
other offerings were in the works. He cited several of the
brand's former models, including the Commanche pickup and
venerable Wagoneer SUV, as possible influences on future
offerings.

"We just need to find the modern interpretation of those
great vehicles," Bell said.

Analysts and industry forecasters say Jeep could introduce
as many as three or four new models in the next few years.

Mike Wall, an analyst with the automotive forecasting firm
CSM Worldwide, said Jeep sales have been hurt in part by a
market shift away from traditional SUVs to easier-riding,
car-based offerings known as crossover vehicles.

Building such a vehicle has been all but impossible for Jeep
because of its commitment to giving all models a "trail-rated"
designation, meaning they meet strict off-road
specifications.

Wall predicts Chrysler will back off somewhat from its rigid
off-road stance and introduce a softer-riding Jeep in 2006.
Such an introduction would likely cause a ruckus among Jeep
loyalists, but the brand must look to new markets to boost
business, he said.

"If they want to drive volume and push the Jeep brand to a
higher echelon, they'll have to move into that soft-roader
realm," Wall said.

Some observers predict Jeep eventually will launch a
mega-SUV or large sport utility truck to take on rivals such as
General Motors Corp.'s Hummer brand.

Bell wouldn't say if Jeep's Hummer-like Rescue concept shown
earlier this year was a glimpse of what's to come, but he said:
"Jeep is an off-road vehicle, and you can get too big to be
safe as well as capable off road. Some of our competitors have
gotten vehicles that are too big. Jeep will not be too
big."

That suits Jeep owner Mario Gallegos of Houston just fine.
Gallegos, a state senator from Texas who's driving his second
Grand Cherokee, said he'll stick with the brand as long as it
continues to offer the type of rugged handling he needs to get
around his state's diverse landscape.

"I don't drive the Jeep for its size," Gallegos said. "As
long as I can strap my grandson in the back, it's plenty big
enough for me."